GUANGZHOU, China - Europe's biggest carmaker, Volkswagen plans to more than triple its sales in south China by 2018 as a main driver for its strategy to double sales to 2 million units in the country by that time, its China chief said on Sunday.

Volkswagen, which competes with General Motors and others globally, is stepping up its presence in China which has overtaken the United States as the world's largest auto market this year.

The extraordinary growth in our sales volume in China will continue to accelerate our pace of development and may well achieve far ahead of our schedule of 2018 of two million units, Winfried Vahland, president and CEO of Volkswagen's China operations, told reporters.

Even though Volkswagen is a major dominant player in north and east China with an over 20 percent market share each through its partnership with SAIC Motor and FAW Group, it only has 12 percent of the market in the south.

South China is today one of the wealthiest and most developed markets within Asia, Vahland said.

South China, where Japan's Toyota, Honda Motor and Nissan Motor all have manufacturing bases, is expected to contribute to about a third of the country's GDP, up from 30 percent in 2008, official data showed.

Volkswagen is launched its south China strategy in 2007 in Hong Kong, the largest tourist destination for the mainland and a trend setter for the whole Asia Pacific region, Vahland said.

Volkswagen is the best selling European car maker in Hong Kong and had 21 percent share of the market in the first ten months of this year, just behind Toyota's 22 percent, but Volkswagen executives said they are confident to achieve number one in 2010.

China has been a major bright spot this year amid a global industry downturn thanks to Beijing's policy incentives, including cuts in sales taxes for smaller cars, which has significantly bolstered automobile demand.

Vahland said he expected to sell about 1.4 million vehicles in mainland China and Hong Kong this year, up more than 35 percent from 2008.

To maintain its growth momentum in a market where GM, Ford Motor are also speeding up expansion, Volkswagen in September unveiled a plan to invest 4 billion euros ($5.95 billion) in China from 2009 to 2011 to expand its vehicle production capacity and for R&D.

It will roll out 20 new models in China from 2010 to 2012, Vahland said.

($1=.6727 Euro)

(Editing by Jon Loades-Carter)

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